Correlation Between Disney and Klépierre
Can any of the company-specific risk be diversified away by investing in both Disney and Klépierre at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Disney and Klépierre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Klpierre SA, you can compare the effects of market volatilities on Disney and Klépierre and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Disney with a short position of Klépierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Klépierre.
Diversification Opportunities for Disney and Klépierre
Excellent diversification
The 3 months correlation between Disney and Klépierre is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and Disney is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Walt Disney are associated (or correlated) with Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Disney i.e., Disney and Klépierre go up and down completely randomly.
Pair Corralation between Disney and Klépierre
Considering the 90-day investment horizon Disney is expected to generate 1.23 times less return on investment than Klépierre. In addition to that, Disney is 1.03 times more volatile than Klpierre SA. It trades about 0.09 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.12 per unit of volatility. If you would invest 2,900 in Klpierre SA on November 4, 2024 and sell it today you would earn a total of 62.00 from holding Klpierre SA or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Klpierre SA
Performance |
| Timeline |
| Walt Disney |
| Klpierre SA |
Disney and Klépierre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Klépierre
The main advantage of trading using opposite Disney and Klépierre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Klépierre can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Klépierre will offset losses from the drop in Klépierre's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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